Tear Em Asunder

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RamMan

Joined: 8/22/00 Posts: 11002
Likes: 541


The tarriffs are a very risky proposition and increase the probability of a


recession.


The positive I can see is a fix on protecting intellectual property and maybe leveling the playing field in manufacturing a little more than where it is now.

However, I think tariffs are a bad idea — further thoughts:

Electronics is the largest area of trade (and happens to be my career area). The bottom line is these tarriffs will jack up prices on consumer electronics:

25% cost increases would mean even higher % price increases (due to contribution margin required for operations ).

Net result: demand will reduce sharply at this level of price increase. I believe most of us can live with our mobile phone longer and do not HAVE to have an IoT devices or other entertainment based electronics -- these all are in the category of "nice to have" but are not necessities of life and there is a point where the price is too high. A projected demand drop absolutely means shut downs, layoffs, and ultimately a potential recession if things drag out.

And there are other large areas of trade that will impact customer demand like clothing. If this goes to far, again, customers will simply delay purchasing or not buy. Again, a quick way to get into a recession.

My hope is that this is final negotiation posturing to get the Chinese government to get changes made — their economy and strength is at risk and maybe they buckle to avoid a recession there.

Really hope we don’t go forward with these tariffs, and definitely avoid recession please!







[Post edited by RamMan at 05/15/2019 4:08PM]

(In response to this post by Cooter)

Posted: 05/15/2019 at 12:10PM



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